International Firms Globalization And Organizational Culture Business Essay



Company's performance and success of merger are fully depending on the organizations structure and the culture between divisions. When considering the mergers in Multinational companies, the culture plays a major role for the success of the organization. However the Multinational companies need to have different culture for different countries in which it will operates. Since the cultural values of one country differs from another. However when it comes to merger between companies in two different countries then cultural issues are taking major role and over coming cultural issue is important for the success of the merger.

This case analysis the important of the national culture prevails in a countries such as china, South Africa and how it could impact the performance of a multinational company and especially the mergers. Further this case analyses the management models in cultures which will be useful in managing the national culture in the mergers in tow different national companies.

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"When a company goes into another country, local managers become more nationalistic," managers are falling back on culture issues for wakefulness and understanding of philosophy and behaviors.

Multinational culture

"Culture is the set of important understandings (often unstated) that members of a community share in common" (Sathe1985a, page. 6).

National culture is defined as 'the collective programming of the mind acquired by grows up in a particular country' (Hofstede, 1991, page. 262)

Therefore each and every organization especially multinational organization has its own practices values and rules of social interaction and interpretation, this will be heavily depend on the country in which the company operates in. Therefore it is very important for an international firm to understand the culture of different countries when establishing and operating the business in those countries and acquire the company in different country. In past years there has been appreciation of a relationship between safety and culture (Helmreich and Merri1998)

The main strength or the power of cultural perspective as a whole is its appreciation of the fact that cultural values of an organisation and attitudes of people are different in degree at least, if not in absolute terms in some cases, from one company to another company, secondly the fact that different cultural groups of people behave differently under similar circumstances because of the differences in their original values and attitudes, and finally the important role that culture plays in multinational organization when comes to mergers in shaping work organizations and other social institutions.

"Roberts and Boyacigiller (1984) suggest that the most fundamental problem in this area has been the lack of any agreement as to how to define culture, and the consequent lack of a currency within which to conduct studies."

The writing abounds with definitions of culture varies from person to person. However the Culture, to some researchers or the professors, is some combination of norm, principles, feelings of the people, thinking of the people, roles of the staffs, rules of the organisation, behavior of the people, beliefs of the person, attitudes of the person, expectations from others, meanings, and etc…. However for someone the culture is understood by what it does not include: economics of the country, politics of the organisation, law, religion, language of different people, education level, technology advances, industrial environment, society or even the market.

"Whatever 'culture' is or is not, the problem, as Chapman (1992b) points out, will not be solved by making further efforts in the same direction. It is too fundamental to be solved through tighter definition. 'Culture' resists operational definition, not because it is a particularly intractable area of human affairs, but because the idea is tied to a particular context."

The problem of 'culture', or its locally-sensitive correspondent, and its peculiarity from 'nation' poses another difficult to cross-cultural researchers or professors. 'Culture' in its constricted sense seems too tapered a concept and one is tempted to replace it by 'national nature. A cross-national study of multinational organizations would mirror the view that companies are influenced by other organization (Mergers) beside culture. The word 'nation' reflects not only the culture, but also the other social factors such as values and attitudes. The economic and political institutions which have a major bearing on the management styles of organizations located in particular countries such as South Africa and China.

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Modern organizations differ from the types of society to whom the notion of culture was originally applied by good quality of the massive amount of information available to origination. This in order is quite often equally and contemporaneously available in the world.

Cultural affects in the merging two different national companies

Merging Chinese company with South African company would be successful or not based or depend on the underpinnings of the economy. Some cultural affects are evaluated below.

Style of decision making: For the rapid decision making, the management requires the rapid decision making. Further different decision making style will slow down the decision making even the decision making might be wrong and it can lead the failure of the implement decision.

Leadership style: change in management style can produce the high earnings among employees who are not willing to adjust. And this will create the problem of loosing intellectual capital and market contacts through the employees.

Ability to change: This is where the people are enthusiasm to take risk in new things by hub on maintaining the current state and meeting goals. However the mergers might create the disinclination to implement new strategies and reluctance to work through the inevitable difficulties in creating new company.

How people work together: Merged companies create boundary between functions that come from each heritage company, or new functions that integrate people from both heritage companies. If the cultural assumptions of the heritage companies are conflicting, then processes and handoffs may break down with each company's employees becoming frustrated by their colleagues' failure to understand or even recognize how work should be done.

Critical analysis of two models in multinational organizations culture

Organization can use the Hofstede "the major factors that differ in cultures" in considering the cultural practices. It will helpful to for a multinational company to understand the different cultural types in different organizations. And take necessary working setting for the company's employees who have different cultural back ground.

Hofstede have been identified following cultural types, Power of Distance, Uncertainty Avoidance, Individualism, Collectivism, Masculinity, Femininity which are described as follows

Power Distance. The fundamental or the basic issue which are involved with Power Distance is how society or group of the people are going to deals with the fact where people are unequal. Some societies let these inequalities grow over time. However while others try to downplay them. In organizations especially the newly merged organization, this height relates to the degree of centralization of authority and the degree of autocratic leadership.

Therefore if one person from the organization from low power distance cultural background is report to a manager who has come from the high power reserve background, then the manager who is from high power might feel that the employee is not respecting him or her, and try to avoid the employee or give simple task to the employees and ignore them. Sometime the manager may tend to rank the employee as low performance when it comes to year end performance review in the organization.

Uncertainty Avoidance. Uncertainty Avoidance indicates how members of a society react to uncertain and ambiguous situations. People in high uncertainty avoidance countries attempt to avoid these situations by providing greater stability, establishing more formal rules, not tolerating deviant ideas, and relying on the knowledge of experts.

People with high uncertainty avoidance are characterized by high levels of anxiety and aggressiveness that create a stronger inner motivation in people to work hard. People in the low uncertainty avoidance countries tend to accept each day as it comes and take risks more easily.

So if the expatriate employee is from low uncertainty avoidance countries is appraised by a host country manager who is from high uncertainty avoidance, then he / she may feel that the expatriate employee is not a hard worker, and tend to give a lower rank to the expatriate.

Individualism-Collectivism. This measurement describes the relationship between an individual in an organisation and others in the society. Individualism implies that everyone is supposed to look after his or her own self-interest and that of his or her immediate family members. The high amount of individual freedom in such societies makes this practicable. Workers are seeking independence, diversity, enjoyment, and person financial security within their organization.

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Collectivism implies, however, that ties up between individuals are strong.

Masculinity-Femininity. This measurement indicates the division of roles between the genders. Some countries try to standardize the division of the social gender role. These nations are called "masculine" societies, stressing the importance of performing or achieving something visible and high hard workers in china people are masculine.

Other countries stress less division between the roles of the genders especially in South Africa. In these calls "feminine" society's dominant values include valuing relationships among people, having a better quality of life and life conscious, and helping others. Organizations which are dominates by the feminine societies display greater equality between genders, as well as foucs on the quality of work life. Relationships with people are important for them, and they are highly interdependence in the workplace and they work as an individual not a group.

Therefore if an employee comes from a Femininity culture then he / she put more emphasis on valuing the relationships among people, but if the manger of host country is Masculine culture (China), then he or she wants achieving something visible, so he tend to think, the employee is not doing the job well and try to stop his career progression. And there will be conflicts among people. And thereby the employee will lose the motivation and he/ she will underperform. This will ultimately affect the company's overall performance.

Two critical incidence related to the national culture

A highly productive business perpetually has a high performing organizational culture that aligns well both internally and externally to support the overall objectives of the business. This organizational culture shapes the employee experience, which in turn impacts customer experience, business partner relationships and, ultimately, shareholder value.

The critical incidences related to the national cultures are when company merge with the other company in different country then the cultural will become the critical success factor.

Further in mergered organization the two critical issues management will come a cross those are……

Working style: Two team are working under the merged organsation. One team from south Africa the work in a flexible hours and they are very interesting characters and they work with the fun. The other team is very serious type and they never move with the people and very focus on work they don't have fun at work place who are from china. Managing two team is difficult because the working culture and attitude is totally different from one to the other. And always there are conflicts between two teams which are from two different countries.

The other issue might be from the suppliers those are from different countries one is from China the other is from South Africa. Their culture is complex whole which includes some identities those are awareness, approach, art, philosophy, laws, customs and any other capabilities and habits acquired by man as a member of society". According to this, it is easy to know that each and every nation has the different cultural preferences, and national tastes and value standards. These factors impact on every part of the multinational companies. Especially on marketing management, human resource management, administration management and alliances management. Further management has to consider the cross culture issues when they run multinational business in the merged company. And language is another issue for this merged company because for Chinese and Africans are use two different language. Especially with the suppliers and the customers who are having different extent of the language is the problems. Especially conferences telephone conversation the understanding and the pronunciation and the actions are different.

Therefore this can be solve When management know there may be language differences, the have a greater awareness of the potential for problems. However, much more often it's a completely different way of seeing things and an inability, or unwillingness, to see what the other person is seeing that causes the difficulties.

The management style which helps to resolve the problem.

Job design: Job design is important to reduce the conflicts which are arrived due to the conflicts of national culture. However the potential benefits of improved job design are unlikely to be realized if attention is focused on the content of jobs alone. It is important, that the process which redesign is carried out. This leads to recorgnise the importance of management style and, increasingly, of organization culture. Central to improving the quality of working life is a participative, open style of management involving employees in decisions that affect them, including the design or choice of the technology itself. Personnel policies, including those related to pay and benefits, should attempt to develop a relationship of trust among all members and sections of the organization, and a confident partnership approach to trade unions.

Job satisfaction: The management involves technical knowledge, human relations' skills and co-ordination of work activities in an organisation. However the effective supervision is necessary for a pure job satisfaction and high levels of work performance. Compassionately and thoughtful leader behavior is likely to generate high worker satisfaction. Supervisors who adopt a considerate manner towards workers tend to have the more highly satisfied work groups. Lack of job satisfaction and unhappiness at work, may also arise from problems connected with managers and it will turn into the cultural problems in an organisation.

Change management: This should be done in a proper manner therefore the increasing speed of technological and structural change has made it very important to address the issues of managing change in organsations in ways that would ensure the best outcomes for organizations and for the people. Further the important issue is still the jobs which people are asked to perform in an organsation. When change is being planned, particularly if new technology is to be introduced, a 'plenty of opportunity' exists to think about the work that people will do and the design of their jobs and the security. The aim is to ensure that the quality of working life is improved rather than damaged.

Concern of the quality of working life has also been supported by government rules, for example in the areas of employment protection, employee involvement, and health and safety at work. Such legislation through management attention to the importance of the work environment and the situation, in which work is carried out, which in turn can have a direct effect on job satisfaction. Improving job design needs to take account of how people perceive their present tasks and involving them in changes which affect them and their jobs. It involves the ways of thinking about people at work.

Conclusion of the case study

An organization's culture has a considerable impact on its ability to implement its strategy and to achieve business goals and objectives among two different merged companies. If culture and work environments are refined intentionally, it improves dramatically an organization's ability to implement, and they often become better places to work. (Ghirmai T Kefela (2010). So a manager working in a merged firm needs to identify the cultural issues with his or her subordinate and try to solve the problem through adopting a better management style according to the situation. Because the company entitle to provide a friendly working environment for their employees in order to increase the efficiency and the quality of organizations's product and success of the mergers.


.Appendix 01